Innovation and Sustainable Business Development for CommBank

This report analyzes the performance of CommBank using design thinking and defines concepts like organizational environment, innovation trend, innovation strategy, innovation capabilities, innovation value creation and capture. It recommends innovation initiatives and capabilities to develop, and how to ensure strategic alignment within organizations.

Running head: INNOVATION AND SUSTAINABLE BUSINESS DEVELOPMENT 1
Innovation and sustainable business development
Student’s name
Professor’s name
Institutional Affiliation
Date

INNOVATION AND SUSTAINABLE BUSINESS DEVELOPMENT 2
Table of content
Table of content..........................................................................................................................................2
Executive summary.....................................................................................................................................3
CommBank (finance and banking)...............................................................................................................4
Background of CommBank (finance and banking)...................................................................................4
Design Thinking.......................................................................................................................................4
Concepts and their relationships.............................................................................................................5
How the creation of an innovation strategy ensures strategic alignment within organizations and why
it is crucial................................................................................................................................................6
The impact of the design thinking on the CommBank (finance and banking).........................................6
Opportunities their impact on CommBank..............................................................................................7
Business model canvas by Osterwalder and Pigneur (2010)...................................................................9
Recommendations.................................................................................................................................10
Organizing the innovation activities..................................................................................................10
Additional innovation capabilities which the organization should develop.......................................11
The innovation initiatives which CommBank should pursue.............................................................11
Recommendations.............................................................................................................................12
Conclusion.............................................................................................................................................12
References.................................................................................................................................................13

INNOVATION AND SUSTAINABLE BUSINESS DEVELOPMENT 3
Executive summary
The CommBank also known as CBA or Commonwealth Bank of Australia is a global business
organization which was created in the year 1911 by the Australian government. The Bank is
among the most prominent business organizations within Australia. CommBank is commonly
known in offering the financial support and banking services to various institutions, business and
retail customers. Its located in various parts of the world namely; New Zealand, Australia, the
UK, and the Asia Pacific. CommBank business organization is as well known in giving banking
commodities like credit cards, business account, business loans and overdrafts. The main
objective of this report is to first use the selected design thinking and use it in analyzing the
performance of CommBank. Secondly, defining various concepts like the organizational
environment, innovation trend, innovation strategy, innovation capabilities, innovation value
creation and capture. Thirdly, recommend how CommBank innovation strategies best act on
design thinking through. Lastly, this report will give a recommendation on how CommBank can
best make sure strategies are aligned in addressing the design thinking trend.

INNOVATION AND SUSTAINABLE BUSINESS DEVELOPMENT 4
CommBank (finance and banking)
Background of CommBank (finance and banking)
The CommBank was established in the year 1911 by the government of Australia, and in 1996
the bank was wholly privatized. CommBank is among the four most prominent business
organizations within Australia and was high listed in the stock exchange of Australia in 1991
(Schlagwein, Thorogood & Willcocks, 2014). The company is commonly known in offering
financial and banking services to various institutions, business and retail customers in different
countries (Borio, 2011). For instance, New Zealand, Australia, the UK, and the Asia Pacific.
CommBank is as well known in giving banking commodities like a credit card, business account,
overdrafts and business loans. The company offers assistance to institutional and corporate
clients by helping them to manage their liquidity and cash flow (Worthington, 2016).
CommBank helps the Australian government to concentrate on innovations that show an image
of its value as a company. The Australian government has always recognized CommBank as one
of the highly innovate organization in the country. The achievements of the CommBank are
guided by a belief that its only innovation that can help in delivering a secure vision and
facilitate financial stability of business, people and the whole community.
Design Thinking
The selected innovation trend, in this case, is design thinking. Design thinking is a holistic and
systematic technique that operates through an iterative cycle and resorts to criteria used by the
designers in meeting the need of people, concerning restrictions within the business, and
technological systems difficulties (Liedtka & Ogilvie, 2011). According to (Liedtka, 2018)
design thinking offer a good start in addressing general issues. For example, the design thinking
suggests that each project should go through various spaces namely; ‘ideation,' ‘implementation'

INNOVATION AND SUSTAINABLE BUSINESS DEVELOPMENT 5
and ‘inspiration.' Inspiration refers to an aspect that can either be an opportunity or a problem.
Implementation is a concern with setting a specific course with the aim of introducing the project
within the industry. Ideation is the procedure of validating and developing a new approach.
Concepts and their relationships
Organizational environment is described as a set of elements used in defining an organization
making it look different from others in a certain period impacting the behaviors of personnel
within that organization. These aspects are linked to the internal environment of an organization
or could be between one organization and the other attribute to the relative stability of that
organization (Allen & Powell, 2012).
Innovation trend is defined as the modern, creative or a new idea viewed as an appropriate
solution that can achieve unique needs in an existing business organization. The trend can take
place via acquiring more sufficient commodities, services, processes, business techniques and
technologies made available to the community.
Organizational capability can be defined as the ability of the business organization to establish
new services and products which can be termed as the foundation of innovation of business
organizations. For a company like CommBank to meet substantial economic growth, it must
have the capability of creating new opportunities such as employment within the region.
Innovation creation value can be described as improving the quality of the products and services,
establishing the new product and services or reducing the cost (Cheah et al. 2015). The concept
allows the organization to develop its growth, survival, and capability of competing in the
changing business environment.

INNOVATION AND SUSTAINABLE BUSINESS DEVELOPMENT 6
Capture in management refers to what a business organization can present and offer to stand out
in a competitive environment. Capture in a business enterprise is essential since it helps to figure
out the leading skills and knowledge required in corporate strategies, financing and project
management (Shamsuddin & Xiang, 2012).
How the creation of an innovation strategy ensures strategic alignment within
organizations and why it is crucial.
For any corporate strategy to work successfully, it must be aligned with the organization's
policies. The alignment will happen in cases where the critical management of the organization
is ready to take the lead in initiating the innovation (Van Bommel,2011). Then the middle
management must as well take part in all innovation activities which is an excellent opportunity
in generating new and appropriate ideas. The senior management does not take part in innovation
strategy for fun but to establish a firm parallel between the innovation and corporate strategy
(Etzkowitz & Ranga, 2015). Thus, the strategic alignment will help in saving time and cost in
creating the new services and products which could take more time when the strategies are not
aligned in the corporations.
The impact of the design thinking on the CommBank (finance and banking)
Today, many banks focus on the experience of its clients, thinking and formulation of the startup
which is equivalent to design thinking (Anderson, Potočnik & Zhou, 2014). CommBank is
looking forward to unfolding and shape the model of their business by matching their demands
and opportunities. Design thinking is one of the techniques that can be utilized by the
CommBank in its endeavors. One of the impacts of design thinking is adding considerable value
to CommBank. Theoretically, such value may increase the innovation within the team together
with how each group is being handled. The excellent management will be contributed by the link

INNOVATION AND SUSTAINABLE BUSINESS DEVELOPMENT 7
between the techniques and criteria in reducing the rate of uncertainty in deciding g the teams
(Chardon, 2011).
Also, design thinking trend is expected to raise the performance concerning innovativeness in the
processes of solving various issues. The other approach to incorporate in resolving issues in
CommBank is the brainstorming. Brainstorm can play a pivotal role to increase the sufficient
methods of provoking the cognitive stimulations to inspire the teams in coming up with creative
decisions.
The design thinking based on the methodology can help in improving communication
significantly among the employees. This is because design thinking as a tool establishes a
platform of exchanging information and personal decisions in real-period (Kimbell,2011). Other
strategic techniques can be used in analyzing operations and their impacts within CommBank.
One of the strategic tools that will be used in analyzing the impact, threats, and opportunities in
CommBank is SWOT analysis. The management of CommBank can utilize a SWOT analysis in
the situational examination of the industry. It's a very crucial tool in comprehending the
strengths, weaknesses, opportunity, and threats faced by the CommBank within the market
environment. CommBank is one of the best in its market and has several strengths that have been
helping it in thriving within the industry. The strengths have enabled CommBank to penetrate the
new market and to protect its share in the existing industry. Examples of strength within
CommBank are like a good recording and tracking of the commodities, competent workforce and
automating of their activities. CommBank should consider improving many weaknesses. This is
because that strategy is all about building on a competitive benefit and positioning its self
strategically.

INNOVATION AND SUSTAINABLE BUSINESS DEVELOPMENT 8
Opportunities their impact on CommBank
Below are opportunities that can help the CommBank to stand out in a competitive market
 Developing a market that will result in dilution of rivals to enhance the CommBank in
raising its effectiveness in the market when compared to others.
 Cultivating on the recent trends within the behaviors of the consumer to establish new
business markets. This will present a nice opportunity for the company to increase the
stream of its revenue and new categories of goods.
 It is acquiring new clients through online platforms. This can be facilitated by the
investment made by CommBank into the online platforms. Through an online platform,
CommBank will be able to interact and serve its clients in a better way.
 The decrease in the inflation rate. The low rate of inflation results in high stability of the
market; a flat rate of interest will increase the number of clients.
 Threats and their impact on CommBank
 Isolationism within the economy of America may result in the same reaction from other
states which can negatively affect the CommBank internationally.
 Lack of skilled employees in various world market poses a significant threat to fast
growth and development of CommBank within such markets.
 The development of modern technologies by competitors might be a major threat to the
long-term future of CommBank.
 CommBank does not frequently supply innovative services and products. For the past
few years, the company has been developing commodities similar to those produced by
its opponent. Then they do not supply the products regularly resulting in low and high
swings for some time.

INNOVATION AND SUSTAINABLE BUSINESS DEVELOPMENT 9
 High competition- The availability of a stable market has enhanced a high number of
competitors dealing with the same commodities to get into the market. This has created
more pressures on the profitability by the CommBank as well as a significant challenge to
overall sales of goods and services.
Business model canvas by Osterwalder and Pigneur (2010)
The Business model canvas is comprised of nine pillars according to (Osterwalder& Pigneur,
2010). The right part of the model focuses on five blocks namely; customer segment, revenue
stream, value proposition, customer relation, and channels. The left part emphasis on creating
values through external and internal procedures using primary resources, partnerships, costs and
activities as shown below.
Key partners
Public Institutions
like hospitals
Government
Business customers
Retail clients
Key activities
Provides
financial
assistance to
corporation
Managing the
cashflow and
liquidity
Value
proposition
Low price goods
Provides
efficiency
services
Offer quality
goods and
services
Customer
relationship
CommBank has
created a social
platform where
members can air
their views
The CommBank
offer personal
services during
activities like
financial
Customer
segment
Retail
customers
Business
customers
Government
institutions.

INNOVATION AND SUSTAINABLE BUSINESS DEVELOPMENT 10
assistance
Key resources
Employees
The managers
Credit cards
loans
Channels
Online platforms
like the
websites.
Cost structure
The CommBank pay its employees an
average of 85,000 dollars every year.
Revenue stream
Interest from the loans and credit cards
Fees charged from various services.
Opening account fees.
Government support.
Recommendations
Organizing the innovation activities
The first activity in innovation is increasing the level of education among the workforce because
changes are based on the ability of skills and knowledge of the modern trends (Sorescu,
Frambach, Singh, Rangaswamy & Bridges, 2011). Secondly, the employees should be given a

INNOVATION AND SUSTAINABLE BUSINESS DEVELOPMENT 11
motivation to help them develop innovative decisions. Thus, for CommBank should establish
incentives programs-based on innovations. Thirdly, the first stage in the innovation procedures
should be recording creative ideas systematically. This is very important as it will clarify and
inform the workforce on how the innovative decision should be recorded. Lastly, a CommBank
organization can select an idea that can be easily implemented first.
Additional innovation capabilities which the organization should develop
One of the innovation capabilities which should be added to CommBank is the operational
capability. Operation capability should be incorporated in areas like quality monitoring,
maintenance, inventory control and flow of business activities.
The next capability is developing the technology. Developing technological capability will
enable the CommBank to choose and utilize the technology to create modern techniques and
procedures in developing new goods and services.
The innovation initiatives which CommBank should pursue
One of the innovation initiatives which CommBank should embrace is including the community
of entrepreneurs and innovators in the process of formulating their strategies. According to
Baumgartner (2014) increasing the number of innovators in innovation activities could serve as
one of the best programs in any business organization. The second initiative is considering
investing in a wide range of the market. This can be achieved by creating an organizational
partner program like mission-oriented initiatives. Lastly, with the emerge of the social media
platforms, CommBank should begin client evangelists to increase its growth and development.
Evangelist could be the workers who were part of the innovation group or other individuals
outside the firm.

INNOVATION AND SUSTAINABLE BUSINESS DEVELOPMENT 12
The CommBank uses one of the ways is examining the pricing power of their services. This is
achieved through analyzing their pricing power and aligning it in such a way they do not lose
business to their opponents (Schaffers, Komninos, Pallot, TrousseNilsson & Oliveira, 2011).
Secondly, the CommBank ensures they measure the sustainability and magnitude of creating
value or adding value to their services. This is met by comparing the margin and turnover. This
helps the CommBank to establish returns lower assets turnover.
Recommendations
Considering the analysis and recommendations, it is as well essential to suggest more ways to
ensure CommBank strategies alignment in addressing innovation trend.
 Support and having a positive attitude towards the management team.
 Concentrate on organizational innovative programs.
 Work and adapt structures of innovative decisions.
 CommBank should determine and recognize the responsibilities and powers of the
individual employees.
Conclusion
Design thinking is one of the innovation technique that operates through an iterative cycle and
resorts to criteria used by business organizations in meeting the need of people, concerning
restrictions within the business, and technological systems difficulties. The design thinking is
good in creating the values useful in improving the quality of the products and services,
establishing the new product and services or reducing the cost. The design thinking concept will
allow the CommBank to develop grow, survive and be in ability to compete in the changing
business environment.

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References
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